Contract farming in Zimbabwe : the Mutasa garlic project
Thesis (MDF (Development Finance))--Stellenbosch University, 2012.
Contract farming is being given renewed attention on the African continent in the wake of reduced public expenditure for credit programmes. Many African countries have recognised the potential of contract farming in linking farmers to viable markets and stimulating agricultural production in the face of globalisation. In Zimbabwe prior to 1998, smallholder farmers were poorly integrated in the cash economy and had extremely low incomes, largely due to poor access to productivity-enhancing inputs. Small-scale farmers were marginalised as the economy focused on the larger commercial farms. Currently, mainstream banks have been unable to provide funding due to their own capital inadequacy and the view that smallholder farming is a risky and unprofitable sector. There is also a shift in roles as the government moves from direct participation in agricultural production and marketing towards facilitation, legislation and enforcement. The private sector is now participating more actively in the agricultural sector, providing credit to smallholder farmers. This research seeks to better understand the partnership between private and public sector players in Zimbabwe’s agricultural credit programmes, through a study of Leo Marketing and the Zimbabwe Agricultural Market Development initiative called the Agricultural Input Supply Programme (AISP). In this research, the Mutasa Garlic Project, implemented by the AISP, has been analysed to achieve the objective. One hundred smallholder farmers have been contracted to commercially produce garlic in the Mutasa district. Using a sample of 20 farmers, the study examined how this financing model contributes to improved access to productivity-enhancing inputs, viable markets and technical expertise for the farmers. The analysis indicates that farmers have access to inputs but the model still needs improvement in distributing them efficiently to ensure that all farmers have their inputs in time for the planting season. Marketing and extension services in the project are operating well. The study reveals that there is potential for growth in the number of farmers contracted to the programme. As the contracting model continues to improve, the same model can be used for similar projects in surrounding districts.